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Siblings of multi-millionaire Herbalife tycoon in battle over will

The younger lover of a multi-millionaire health drinks tycoon has beaten his three siblings in a bitter High Court fight over his £6.4million will.

Former divorce lawyer Alan Lorenz made millions after giving up a law career to sell weight-loss shakes through controversial nutritional supplements group Herbalife.

Mr Lorenz joined the California-based company in 1984 and rose to become a senior member, travelling the world as its products spread to more than 90 countries.

He died in 2021 aged 78, leaving his £6.4million fortune to his partner Sheila Caruana, 58, with whom he had entered into a civil partnership weeks earlier.

But his will ended up at the centre of a court fight in London – with his siblings, Robert Lorenz, 80, Anthony Lorenz, 76, and Vanessa Manasseh, 79, claiming a share.

Alan Lorenz left his £6.4million fortune to his partner Sheila Caruana, 58, when he died in 2021

Alan Lorenz left his £6.4million fortune to his partner Sheila Caruana, 58, when he died in 2021

(From left) Anthony Lorenz, Vanessa Manasseh and Robert Lorenz - the siblings of Alan Lorenz - are pictured outside the High Court in London during their legal battle over his will

(From left) Anthony Lorenz, Vanessa Manasseh and Robert Lorenz – the siblings of Alan Lorenz – are pictured outside the High Court in London during their legal battle over his will

The trio claimed Ms Caruana had failed to honour a promise to their brother that, if he left her his entire estate, she would then ‘do right’ by his family by splitting his money with them.

They claimed he had only left her the money because he had an ‘abhorrence’ for paying tax and her much younger age made it a tax efficient way of passing on his fortune.

However, after Ms Caruana’s lawyers argued that courts cannot enforce ‘moral obligations’, a High Court judge has now thrown out the case, meaning she can keep every penny.

The court heard that Charterhouse-educated Mr Lorenz died a multi-millionaire after making his riches selling health drinks.

Herbalife is a worldwide ‘direct-selling’ company, founded in 1980 to sell weight loss shakes, but expanding to produce other nutritional products, which it sells in over 90 countries.

Alan Lorenz had entered into a civil partnership with Sheila Caruana weeks before his death

Alan Lorenz had entered into a civil partnership with Sheila Caruana weeks before his death 

Founded in 1980 in the US, Herbalife has attracted controversy, having been forced to deny claims of having a ‘pyramid’ type sales structure.

The company agreed to ‘fundamentally restructure’ its business in the US and pay $200million as part of a 2016 settlement of a US Federal Trade Commission case.

Mr Lorenz began his relationship with fellow Herbalife member Ms Caruana around 2012 – but, as there was a 23-year age gap between them, he was keen to begin tax planning for his old age.

Although previous wills left his siblings a share, in 2020 he made a new will, leaving everything to Ms Caruana, with whom he then formed a civil partnership so that she would not have to pay inheritance tax.

For Robert Lorenz, who brought the claim against Ms Caruana but was backed by his siblings, barrister Richard Dew said Alan Lorenz had ‘a history of aggressive tax avoidance and indeed an abhorrence of paying tax’.

Alan Lorenz made millions after giving up his law career to sell weight-loss shakes

Alan Lorenz made millions after giving up his law career to sell weight-loss shakes

The only reason he had left everything to Ms Caruana, unlike in previous wills, where his fortune was also shared with his siblings, was to avoid his family having to pay tax, he said.

He added that there was an agreement that, after his death, Ms Caruana would gift money to his siblings and, because she was still relatively young, the gifts would be tax exempt.

However, following Alan’s death, Ms Caruana had failed to comply with the ‘obligation’ on her, which was imposed as part of a ‘secret trust’, he claimed.

‘Alan had a consistent pattern of leaving one half of his residuary estate to his siblings,’ the barrister told the judge.

‘The reasons for leaving a will solely in favour of Sheila and entering into a civil partnership with her were the avoidance of inheritance tax.

Alan Lorenz died a multi-millionaire after making his riches selling health drinks

Alan Lorenz died a multi-millionaire after making his riches selling health drinks 

‘There was expressly no intention to cut out the siblings, rather there was a scheme to make provision for them whilst avoiding inheritance tax.

‘All of the siblings believe that their brother intended that they would benefit from his estate and that Sheila had reached an agreement with Alan as to what would happen.’

In a statement, Robert said he had spoken to his brother in the months before he died and been assured that a share of the fortune would come his way.

‘He said that following the civil partnership he had left everything to Sheila in case anything happened to him and that she would give half the estate to the family, so we would not have to pay inheritance tax,’ he said.

‘He told me Sheila was fully briefed on this. He said that this meant half for Sheila and half for his family. He told me I would get a few million.’

Anthony Lorenz, one of the three siblings of Alan Lorenz involved in the High Court fight

Anthony Lorenz, one of the three siblings of Alan Lorenz involved in the High Court fight 

Mr Lorenz was ‘close’ to all of his siblings, Mr Dew said, and there was no evidence he changed his mind and intended to cut them out, believing that Ms Caruana was ‘100 per cent honourable’.

‘We say it was all to go to Sheila and Sheila was to divide that under the deceased’s wishes,’ he said.

‘Alan was certain Sheila was going to honour his wishes. He believed she gave him an assurance that she would do what he wanted her to do.’

But for Ms Caruana, barrister Penelope Reed KC argued that Robert’s claim had ‘no prospect of success’ as he had insufficient evidence of any legally binding agreement between her and her late partner.

‘The thinking was that the deceased would indicate his wishes but leave the matter for Sheila to decide,’ she told the judge.

Alan Lorenz began his relationship with fellow Herbalife member Sheila Caruana around 2012

Alan Lorenz began his relationship with fellow Herbalife member Sheila Caruana around 2012 

‘There was no discussion of a trust being imposed, let alone who the beneficiaries should be, the terms of any trust or the property to be subject to it.

‘It couldn’t be clearer, in our submission, that his intention was to leave everything to Sheila.

‘She is intended to get everything outright in order to get the spousal exemption from inheritance tax and then it is for her to make gifts to members of Alan’s family.

‘There is no binding obligation on Sheila.

‘It was a choice the testator made here that, if he was going to take advantage of the spousal exemption, he was going to leave everything outright to Sheila and rely on her to make gifts to his family later.’

The siblings claimed Alan Lorenz had only left Sheila Caruana the money because he did not like paying tax and her much younger age made it a tax efficient way of passing on his fortune

The siblings claimed Alan Lorenz had only left Sheila Caruana the money because he did not like paying tax and her much younger age made it a tax efficient way of passing on his fortune

Mrs Justice Joanna Smith noted: ‘That is a moral obligation that hasn’t been complied with and that’s why we are here.’

Ms Reed replied: ‘It is not for the court to enforce moral obligations.’

The case first reached court last December when a judge, Master Francesca Kaye, refused Ms Caruana’s application to strike out the claim against her.

It returned last week for an appeal by Ms Caruana, with Mrs Justice Joanna Smith allowing her challenge and dismissing Robert’s claim.

There was no evidence precisely what assets the alleged secret trust applied to and Master Kaye had not taken full account of the ‘paucity’ of Robert’s evidence, she said.

Herbalife is a 'direct-selling' company, founded in 1980 to sell weight loss shakes, but expanding to produce other nutritional products, which it sells in over 90 countries

Herbalife is a ‘direct-selling’ company, founded in 1980 to sell weight loss shakes, but expanding to produce other nutritional products, which it sells in over 90 countries 

Since the December hearing, he had since formulated his claim in documents but the judge said he stood no chance of proving the legal requirements which are necessary for a secret trust to be established.

‘I now have Robert’s attempt to set out his full case, yet they simply fail to make out a case with a real prospect of success,’ she said.

‘It is abundantly clear that the claimant’s case on secret trust discloses no reasonable grounds for bringing this claim.

‘The onus is on Robert to plead out a prima facie case of a secret trust and he has been unable to do so.

‘In all the circumstances, the appeal is allowed in part and the claim is dismissed.’